IGCSE Economics – Last-Minute Revision
& Case Studies
📘 Quick Revision Sheet
1. The Basic Economic Problem
● Resources are limited, but human wants are unlimited.
● This results in scarcity, which forces choices.
● Every choice involves an opportunity cost.
2. Factors of Production
● Land – Natural resources (e.g., oil, land)
● Labour – Human work effort
● Capital – Man-made goods used in production (e.g., machinery)
● Enterprise – Entrepreneurs who take risks and organize the other factors
3. Opportunity Cost
● The next best alternative foregone when a choice is made.
● Applies to individuals, firms, and governments.
● Helps ensure efficient resource allocation.
4. Production Possibility Curve (PPC)
● A graph showing different combinations of two goods that can be produced when
resources are fully used.
● Point on curve = efficient use of resources
● Point inside curve = underutilization
● Point outside curve = currently unattainable
● Outward shift = economic growth (due to better tech or more resources)
💼 Mini Case Studies
🔹 Case Study 1 – Drought in Agraria
Scenario:
A drought reduces crop production in Agraria. The government must choose between importing
food or investing in irrigation.
Question:
What are the opportunity costs of importing food instead of building irrigation?
🔹 Case Study 2 – TechCity’s Growth Dilemma
Scenario:
TechCity can either boost consumer electronics production or invest in R&D for future
innovation.
Question:
Use a PPC diagram to explain the opportunity cost of choosing R&D.
🔹 Case Study 3 – EcoEnergy’s Expansion
Scenario:
EcoEnergy wants government funding to expand solar power. The government would need to
cut funding from health or education.
Question:
Identify and explain the opportunity cost to the government.
🧠 IGCSE Economics – Quick Revision Quiz
Section A: Multiple Choice (1 mark each)
Choose the correct option.
1. What causes the basic economic problem?
A. Unlimited resources and limited wants
B. Limited wants and resources
C. Unlimited wants and limited resources
D. Unlimited money and goods
2. Which of the following is an example of capital?
A. Factory worker
B. Oil field
C. Bulldozer
D. CEO of a company
3. What is the opportunity cost of attending college full time?
A. The tuition fees
B. The books purchased
C. The income you give up by not working
D. The experience gained
4. A point inside the PPC curve shows:
A. Full use of resources
B. Unattainable output
C. Efficient production
D. Underutilization of resources
5. Which of the following shifts the PPC outward?
A. Natural disaster
B. Improved education and skills
C. Decrease in population
D. Inflation
Section B: Short Answer Questions
6. Define opportunity cost and give one example. (2 marks)
7. Name the four factors of production and give one example for each. (4 marks)
8. Explain what is meant by a production possibility curve. (2 marks)
9. A country has to decide between producing healthcare or military equipment. Explain
how this situation involves opportunity cost. (3 marks)
10. What could cause the PPC to shift inward? Give one reason. (1 mark)
